Where to Find the Best Buy for Health Insurance? Try the Mall

Getting ready for overhaul, insurers are setting up shop for new customers looking for coverage

This summer, New Jerseyans will be able to buy or inquire about healthcare plans at their local mall.

It’s part of insurers efforts to connect more directly with their customers, moving beyond traditional Internet and telephone customer service channels. They’re setting up insurance retail stores where people can ask questions about their health plans, purchase coverage, and attend seminars on nutrition, exercise or chronic conditions like diabetes.

The Affordable Care Act, which creates insurance exchanges where Americans will shop for coverage in 2014, is driving some of this new consumer focus. But insurers are also responding to the trend among employers to hold down the cost of health coverage by switching to health plans that shift more of the upfront cost to their employees, usually via a higher deducible. These plans motivate employees to seek information on how to use their health benefits to maximize their well-being -- and minimize out-of-pocket expenses.

Horizon Blue Cross Blue Shield of New Jersey plans to open its first retail location in Moorestown, and UnitedHealthcare will open its first New Jersey retail store in Lakewood this summer. AmeriHealth New Jersey plans to have kiosks in local malls later this year.

Aetna has launched retail locations elsewhere, although not yet in New Jersey. The company has a retail store in Coral Gables, Fla., and is partnering with other retailers, including Best Buy, which sells several Aetna products in the Chicago area.

Cigna is not moving into retail so far, but is ramping up a major marketing campaign to increase brand awareness. For the past several years it has provided its telephone customer service line 24/7, 365 days a year.

Joseph Albano, vice president of consumer and senior markets at Horizon Blue Cross Blue Shield of New Jersey, said a 4,500-square-foot location in the East Gate Square Shopping Center in Moorestown is now being renovated and will open this summer. An exact date has not yet been set.

Joseph Albano

A move into retail “is something we have been thinking about, as have others in the industry, even before the advent of health reform,” Albano said. Given the rising healthcare costs facing employers in recent years, “the trend has been for employers to push the cost and the decision making down to their employees.” The health insurance industry is responding by “trying to help those employees make more informed decisions about what to do with their healthcare dollars.”

The future of the ACA is uncertain. The U.S. Supreme Court will rule in June on the constitutionality of the law’s “individual mandate” that requires many uninsured Americans to buy coverage in 2014, or pay a fine. If the law is upheld, thousands of New Jerseyans will be buying coverage in 2014. “We think it’s a significant opportunity” to enroll more customers, Albano said.

A retail presence is a two-way learning experience. Potential customers will find out about Horizon and the company will get a better sense of what potential customers are looking for. The idea “is to put a face on what is a very complex organizational system that we have in healthcare, and try to make it less complex for people by having a place to go and have a good old fashioned dialogue,” Albano said.

UnitedHealthcare started opening retail locations last November, and now has two stores in New York and one in Philadelphia. A New Jersey store will open in Lakewood this summer.

“There is no doubt that building a direct line to the consumer is clearly where we see the marketplace going,” said Michael McGuire, chief executive of UnitedHealthcare for New Jersey. “It’s really an opportunity to educate whoever walks in, whether they are a member of UnitedHealthcare or not, about what products we have in the market.”

The company’s retail foray “is a learning process for us,” he said. “Will people come in with claims questions? Do they want to enroll in products?”

And while the retail strategy is not specifically aimed at gearing the company up to sell to new customers in 2014, McGuire said it should position the company to sell more policies directly to the public -- assuming the rollout of the ACA is not halted in June by the Supreme Court.

Charlie Catalano, Cigna's president and general manager for New Jersey, said it remains to be seen if retail will be important for selling health plans in the future, or if the business will increasingly move online.

“If you are sitting at home and thinking about making a health plan purchase, you will go online to see what is offered, which physicians are in each of those networks, and what the cost will be for the different benefit plans,” Catalano said.

Meanwhile, Cigna is doing significant television advertising to develop brand awareness so when customers shop online, they know the company, he said. Another key decision several years ago was making the telephone customer service line available 24/7.

“We have nurses available in the middle of the night for people who want to call us,” he said. “I think we are creating some loyalty when people who need help can call us.”

The ACA mandates the creation of state-run exchanges in 2014 where the uninsured who meet income eligibility rules will be able to buy government-subsidized health coverage.

“At that point it will become increasingly important to be very good at working with customers directly,” Catalano said. But even today, when employers buy coverage for their employees, they really want those employees and their family to have a good experience. And if they do they are much more likely to remain [with Cigna].”

Richard J. Brunelli, president of the Old Bridge-based retail brokerage R.J. Brunelli & Co, said he recently visited a health insurance retail store in Bonita Springs, Fla. “It is something we are seeing evolve around the country. Insurers are making themselves much easier to get to, and they have more exposure than if they were tucked away in an office complex somewhere. We all know they spend a lot of money advertising their services, and it makes sense for them to put their people in a retail setting.”

More non-traditional tenants are going into strip shopping centers in recent years, Brunelli said, including doctor’s offices, urgent care and dialysis centers. Prior to the 2008 recession, shopping center landlords wouldn’t consider non-retail uses, but with the reduced demand for retail space, “they need the income and are renting to new uses.”

It makes sense for health insurers because “the parking lots are generous, and the exposure [to the public] is there. If you have a storefront in a shopping center, you can draw from a larger population, and they see the company’s logo and they see that the doors are open to the public,” Brunelli said. “People who are thinking about getting a quote [on a health plan] but never got around to it, are now invited to come in and have a quick meeting.”